Homework SourseA mutual fund company offers its customers several different
A mutual fund company offers its customers several different funds: a money market fund, three different bond funds, two stock funds, and a balanced fund. Among customers who own shares in just one fund, the percentages of customers in the different funds are as follows:
A customer who owns shares in just one fund is to be selected at random.
(a) What is the probability that the selected individual owns shares in the balanced fund?
(b) What is the probability that the individual owns shares in a bond fund?
(c) What is the probability that the selected individual does not own shares in a stock fund?
| Money market | 21% |
| Short-term bond | 15% |
| Intermediate-term bond | 10% |
| Long-term bond | 6% |
| High-risk stock | 17% |
| Moderate-risk stock | 23% |
| Balanced fund | 8% |
Solution
(a)
P(the randomly selected individual owns shares in the balanced fund)
=(No. of individuals owning shares in the balanced fund) / 100 (Here 100 is the total no. of individuals)
= 8/100
=0.08
(b)
P(An individual owns shares in a bond fund)
=(No.of individuals owning shares in a bond fund) /100
=(15+10+6)/100
=21/100
=0.21
(c)
P(An individual does not own shares in a stock fund)
= 1 - P(An individual owns shares in a stock fund)
=1 - (17+23)/100
=1 - 40/100
=1 - 0.4
=0.6
